This blog has looked several times* at the cases and principles that have followed the decision in Lewis -v- Ward Hadaway  EWHC 3503 (Ch). Applications around allegations of failure to pay the correct court fee have become a new battleground between claimants and defendants, with defendants constantly seeking to strike out and arguing abuse of process, every time a claimant seeks to amend a statement of value.
The issue was considered again by Mr Roger ter Haar QC (sitting as a High Court Judge) in Glenluce Fishing Company Limited -v- Watermota Limited  EWHC 1807 (TCC). The judgment contains some interesting observations on the previous case law and states that those cases should be limited to issues relating to limitation.
- The cases relating to striking out an action because of a failure to pay the correct court fee should be confined to their own facts.
- Those cases did not apply to an application to amend the particulars of claim to increase the value.
The claimant was seeking damages from the defendant alleging breach of contract in the fitting of engines to fishing boats. After proceedings were issued. The claimant initially sought £69,604.00 and the requisite court fee was paid.
The claimant sought permission to amend the pleading to claim £162,132 plus loss of profit. The application was opposed by the defendant.
THE DEFENDANT’S ARGUMENTS
The defendant put forward a number of arguments which principally relied on the fact that an “incorrect” court fee was paid initially.
The judge reviewed the history of the rules and principles relating to amendment and the more recent cases in relation to payment of court fees. In relation to the more recent cases he observed.
- The cases of Page -v- Hewetts  EWCA Civ 805; Lewis -v- Ward Hadaway  EWHC 3503 (Ch); Bhatti, -v- Asghar  EWHC 1049 significantly extended the ambit of the Court of Appeal decision upon which they are based.
- The Court of Appeal decisions were based upon whether a party could lose its rights because of an administrative error by the court office.
- From those decision a “somewhat hard edged” approach had been applied at first instance whereby a claimant whose lawyer had paid the wrong amount in court fees lost the right to right to bring a meritorious case to court.
- “It may be that as this principle is discussed and developed in future cases, those hard edges will be softened.”
- In the present case the defendant was attempting to develop the principle further to a case where a claim had been bought for the purpose of the Limitation Act but an application to amend the claim form was made.
- The defendant did not suggest any abuse of process.
- The Defendant could not point to any prejudice.
- The Court Service would not be the loser since the claimant proposed to pay the fee.
- The claimant could, with due diligence, have proceeded faster.
- If the test was whether the claimant did all that it reasonably could to bring the matter before the court in the appropriate way, including identifying the true value of the claim before issue, then the judge would be bound to resolve the matter against the claimant.
- However this was not the position in law. Such a proposition represented a significant departure from the way amendment applications had been dealt with in the past.
- The recent first instance decisions upon which the defendant relied “should be limited in their applications to the circumstances expressly considered in those cases, namely applications to strike out claims on the basis that those claims were nor “brought” within the applicable limitation period.”
- “I do not consider that any of those decisions justify a root and branch revision of the approach to be adopted to an application to amend.”
- The judge, therefore, approached the amendment on “traditional” lines. The proposed amendment did not introduce a new cause of action but only increased the heads of claim.
- In the absence of prejudice to the defendant, and in the context of considerable prejudice to the claimant, the amendment should be allowed.
- The dangers of not paying the correct court fee: case barred by limitation because wrong court fee was paid.
- Failure to pay the correct court fee does not lead to striking out of an action.